Close up of Barley Grains

Weekly Market Report – 27th November 2019

Wheat Flags

Influence on wheat prices


Wet weather in Western Europe continues to be the main story. French wheat planting advanced just 3% last week to 74% complete versus 98% at this time last year. Here in the UK, the picture is worse with estimates currently putting winter wheat plantings at only about 50-60% complete nationally. This is actually a very difficult number to accurately estimate with a huge variation across the country.

In the US, winter wheat crop condition is rated at 52% good/excellent vs the 5yr average of 55%. Rains in HRW areas should lead to significant improvements in soil moisture to aid development. The US Corn harvest is now 84% complete (up 8% wow), but 12% behind average. A wet week for most producing areas, especially in the WCB will slow down the remaining corn and soybean harvesting.

Negotiations between the US and China continue to impact futures movements. CBOT markets have seen a bit of support in the past week as there seems to be a more positive stance from both parties. There are reports that a ‘phase 1’ deal is close and over the weekend China announced changes to their Intellectual property rights. Previously, this has been identified as a major concern for the US and changes to which can only be seen as a positive step towards a deal. Markets react more cautiously nowadays to any such news as we’ve been here before many times with negotiations twisting from positive to negative rhetoric on a weekly basis. Until an actual deal is announce the market response will be relatively guarded.

In the UK, fresh export trade is at a standstill with any current shipments being the execution of old business. UK wheat and barley are struggling to compete due to the recent rise in domestic prices and Sterling strength which has surged to over 1.17 (against the Euro) on the back of a wider conservative margin in recent polls. That coupled with the firm new crop market dragging old crop futures values up means we are several Euros too expensive to trade.

The latest AHDB Early Bird Planting Survey shows that the UK wheat area is set to drop 9% to 1645Kha which is the smallest area since 2013 due to wet planting conditions. In contrast, the UK spring barley area is forecast to rise 28% as many growers plan to switch from winter wheats to spring malting barleys. Springs oats and spring beans are also a popular choice for those who have given up on winter varieties with the oat crop increasing 10% and pulses up 24%. Conversely, oilseed rape is set to see a 23% drop in plantings.